On the Economic Infeasibility of Personalized Medicine, and a Solution

Marina Chiara Garassino, Kunle Odunsi, Marciano Siniscalchi and Pietro Veronesi

No 33539, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Technological advances and genomic sequencing opened the road to personalized medicine: specialized therapies targeted to patients displaying specific molecular alterations. For instance, targeted therapies are now available for 50% of lung cancer patients—with some alterations affecting less than 1% of patients—greatly increasing life expectancy. In an investment model of drug development, we show that current institutions mandating experimentation and approval of individual therapies eventually disincentivize investments in personalized medicine as researchers identify increasingly rare alterations. Recent AI-based technologies, such as AlphaFold3, make personalized medicine viable when regulatory approval regards the process for drug discovery rather than individual therapies.

JEL-codes: I11 I18 O32 O38 (search for similar items in EconPapers)
Date: 2025-03
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